Frontline Plc — Earnings Release 2015

Aug 26, 2015

FRO - Second Quarter and Six Months 2015 Results

FRO - Second Quarter and Six Months 2015 Results

Highlights

* Frontline reports net income attributable to the Company of $17.4 million

for the second quarter of 2015, equivalent to earnings per share of $0.11.

* Frontline reports net income attributable to the Company of $48.5 million

for the six months ended June 30, 2015, equivalent to earnings per share of

$0.35.

* The Company issued 18.8 million new shares in the second quarter under its

ATM program and this program is fully utilized.

* In April 2015, the remaining outstanding balance on the convertible bond of

$93.4 million was repaid in full upon maturity.

* In June 2015, the Company agreed with Ship Finance to amend the long term

charter parties relating to 17 vessels such that the fixed charter payments

to Ship Finance are expected to decrease by approximately $283 million.

* In July 2015, the Company and Frontline 2012 entered into an agreement and

plan of merger.

Second Quarter and Six Months 2015 Results

The Board of Frontline Ltd. (the "Company" or "Frontline") announces net income

attributable to the Company of $17.4 million in the second quarter, equivalent

to earnings per share of $0.11, compared with net income of $31.1 million for

the previous quarter, equivalent to earnings per share of $0.25.

The average daily time charter equivalents ("TCEs") earned in the spot and

period market in the second quarter by the Company's VLCCs and Suezmax tankers

were $50,600 and $33,800 compared with $49,400 and $33,100 in the previous

quarter. The spot earnings for the Company's VLCCs and Suezmax vessels were

$53,600 and $38,000 compared with $52,200 and $35,000 in the preceding quarter.

Operating expenses in the second quarter were $5.0 million higher than the

previous quarter. An increase in dry docking costs accounted for $5.9 million in

the quarter, as four vessels were dry docked in the second quarter compared with

no vessels in the previous quarter.

Contingent rental expense represents amounts accrued following changes to

certain charter parties in December 2011 and was in line with the first quarter.

Frontline announces a net income attributable to the Company of $48.5 million

for the six months ended June 30, 2015, equivalent to earnings per share of

$0.35. The average daily TCEs earned in the spot and period market in the six

months ended June 30, 2015 by the Company's VLCCs and Suezmax tankers were

$50,000 and $33,400, respectively, compared with $23,400 and $19,800,

respectively, in the six months ended June 30, 2014. The spot earnings for the

Company's VLCCs and Suezmax vessels were $52,800 and $36,400, respectively, in

the six months ended June 30, 2015 compared with $22,600 and $19,800,

respectively, in the six months ended June 30, 2014.

In August 2015, the Company estimates average daily total cash cost breakeven

rates for the remainder of 2015 on a TCE basis for its VLCCs and Suezmax tankers

of approximately $24,500 and $21,000 respectively.

Fleet Development

In August 2015, the Company agreed with Ship Finance to terminate the long term

charter for the 1995 built Suezmax tanker Front Glory. Ship Finance has

simultaneously sold the vessel to an unrelated third party. The charter with

Ship Finance is expected to terminate during the third quarter of 2015. The

Company will receive a compensation payment of approximately $2.2 million from

Ship Finance. The number of vessels on charter from Ship Finance will then be

reduced to 16 vessels, including 12 VLCCs and four Suezmax tankers.

Corporate

In February 2015, the Company bought $33.3 million notional principal of its

4.50% Convertible Bond Issue 2010/2015 at a purchase price of 99% and recorded a

gain of $0.3 million in the first quarter of 2015.

In April 2015, Frontline issued 12,900,323 new shares under the ATM program and

in May 2015, Frontline issued 5,941,251 new shares under the ATM program and the

existing ATM program is fully utilized.

In April 2015, the remaining outstanding balance on the convertible bond of

$93.4 million was repaid in full upon maturity.

In June 2015, the Company and Ship Finance agreed to amend the terms of the long

term charter agreements for 17 vessels on charter from Ship Finance with an

average remaining charter period of 7.7 years. The new agreement took effect

from July 1, 2015. The general terms of the agreement are the following: new

time charter rates for the VLCCs of $20,000 per day; new time charter rates for

Suezmax tankers of $15,000 per day; new operating expenses for all vessels of

$9,000 per day payable by Ship Finance; a new profit split of 50%/50% above the

new time charter rates; and in connection with entering into the agreement the

Company issued 55.0 million of its common shares to Ship Finance. The chartering

counterparty will continue to be a subsidiary of the Company, and in exchange

for releasing the Company from its current guarantee obligation, a cash buffer

of $34.0 million ($2.0 million per vessel) will be built up in the chartering

counterparty. The new profit split arrangement started accruing from July 1,

2015 and will be calculated and payable on a quarterly basis. Going forward,

profit split payments will not be subject to the previous $50.0 million

threshold. The shares issued to Ship Finance as a result of the new agreement

represented approximately 27.7% of the Company's shares and votes. The Company

has registered those common shares for resale with the Securities and Exchange

Commission.

Reference is made to the announcement dated July 2, 2015, that Frontline and

Frontline 2012 Ltd. ("Frontline 2012") have entered into an agreement and plan

of merger (the "Merger Agreement"), pursuant to which the two companies have

agreed to enter into a merger transaction, with Frontline as the surviving legal

entity ("the "Surviving Company") and Frontline 2012 becoming a wholly-owned

subsidiary of Frontline. Frontline has on August 24, 2015, filed a registration

statement with the United States Securities and Exchange Commission ("SEC")

covering the common shares to be issued by Frontline to Frontline 2012's

shareholders in the merger.  The shareholders' meetings of each of Frontline and

Frontline 2012 will be held after the registration statement is declared

effective. The effectiveness of the registration statement is subject, among

other things, to SEC review. This transaction will be accounted for as a

business combination using the acquisition method of accounting under the

provisions of ASC 805, with Frontline 2012 selected as the accounting acquirer

under this guidance.

The Company had an issued share capital at June 30, 2015 of $198,375,854 divided

into 198,375,854 ordinary shares (December 31, 2014: $112,342,989 divided into

112,342,989 ordinary shares). The weighted average number of shares outstanding

for the second quarter was 153,281,991.

The Market

The average rate for a VLCC trading on a standard 'TD3' voyage between the

Arabian Gulf and Japan in the second quarter of 2015 was WS 64, representing an

increase of 5 WS points from the first quarter of 2015. The market rate for a

Suezmax trading on a standard 'TD20' voyage between West Africa and Rotterdam in

the second quarter of 2015 was WS 88, representing a decrease of 2 WS points

from the first quarter of 2015. The VLCC fleet totalled 639 vessels at the end

of the quarter, whilst the Suezmax fleet counted 449 vessels at the end of the

quarter.

The order book for tankers represented about 16% of the overall tanker fleet.

Bunkers in Rotterdam averaged $326/mt in the second quarter of 2015 compared to

$280/mt in the first quarter of 2015.

Strategy and Outlook

The Board of Directors is very pleased with the merger agreement entered into

between Frontline and Frontline 2012. With a large modern fleet, a strong

balance sheet and attractive cash break even rates, the combined companies

should be well positioned to generate significant free cash in a strong market,

and sustain a weak market.

Despite the slowdown seen in the market the last weeks, the Board of Directors

hopes the combined companies will be in a position to start returning cash to

shareholders as quarterly dividends as soon as the merger is completed. The

intention is to pay out excess cash as dividends at the Board's discretion.

The Board believes the combined companies will be well positioned to grow

through acquisition and consolidation opportunities.

Important Information For Investors And Shareholders

This communication does not constitute an offer to sell or the solicitation of

an offer to buy any securities or a solicitation of any vote or approval. In

connection with the proposed transaction between Frontline and Frontline 2012,

Frontline has filed relevant materials with the Securities and Exchange

Commission (the "SEC"), including a registration statement of Frontline on Form

F-4 (File No. 333-206542) , filed on August 24, 2015, that includes a joint

proxy statement of Frontline 2012 and Frontline that also constitutes a

prospectus of Frontline.  The registration statement has not yet become

effective.  After the registration statement is declared effective by the SEC, a

definitive joint proxy statement/prospectus will be mailed to shareholders of

Frontline 2012 and Frontline. INVESTORS AND SECURITY HOLDERS OF FRONTLINE 2012

AND FRONTLINE ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER

DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN

THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Investors and security holders will be able to obtain free copies of the

registration statement and the joint proxy statement/prospectus (when available)

and other documents filed with or furnished to the SEC by Frontline through the

website maintained by the SEC at http://www.sec.gov. Copies of the documents

filed with or furnished to the SEC by Frontline will be available free of charge

on Frontline's website at http://www.Frontline.bm. Additional information

regarding the participants in the proxy solicitations and a description of their

direct and indirect interests, by security holdings or otherwise, will be

contained in the joint proxy statement/prospectus and other relevant materials

to be filed with or furnished to the SEC when they become available.

Forward Looking Statements

This press release contains forward looking statements. These statements are

based upon various assumptions, many of which are based, in turn, upon further

assumptions, including Frontline management's examination of historical

operating trends. Although Frontline believes that these assumptions were

reasonable when made, because assumptions are inherently subject to significant

uncertainties and contingencies which are difficult or impossible to predict and

are beyond its control, Frontline cannot give assurance that it will achieve or

accomplish these expectations, beliefs or intentions.

Important factors that, in the Company's view, could cause actual results to

differ materially from those discussed in this press release include the

strength of world economies and currencies, general market conditions including

fluctuations in charter hire rates and vessel values, changes in demand in the

tanker market as a result of changes in OPEC's petroleum production levels and

world wide oil consumption and storage, changes in the Company's operating

expenses including bunker prices, dry-docking and insurance costs, changes in

governmental rules and regulations or actions taken by regulatory authorities,

potential liability from pending or future litigation, general domestic and

international political conditions, potential disruption of shipping routes due

to accidents or political events, and other important factors described from

time to time in the reports filed by the Company with the United States

Securities and Exchange Commission.

The Board of Directors

Frontline Ltd.

Hamilton, Bermuda

August 25, 2015

Questions should be directed to:

Robert Hvide Macleod: Chief Executive Officer, Frontline Management AS

+47 23 11 40 84

Inger M. Klemp: Chief Financial Officer, Frontline Management AS

+47 23 11 40 76

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1947564]